1Mon·

Weak dollar

$SPY5 (+0.36%) The ETF's current book value is still approx. 11% below the ATH. According to the index, however, the S&P 500 is just below the ATH. It is clear that this is due to the weak dollar. But it doesn't help me if I have invested a lot of money in this ETF. How do you do it? Or how would you trade? Thank you

11 Comments

Epi@Epi

1Mon

What do you want to hear?
USD will rise again? No, it won't for now. The current USD cycle is over. Historically 30% devaluation potential. But it doesn't matter over 20 years, because the EUR USD ratio will remain roughly the same in the long term.

You can take a hedged ETF in the short term or hedge it yourself with derivatives.

I currently have the $DBPG again. It tracks the index x2.

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Esfsx01@Esfsx01

1Mon

@Epi Swiss Franc is a different story unfortunately...😭

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Epi@Epi

1Mon

@Esfsx01 Why? What is fundamentally different except that CHF is a bit stronger?

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Esfsx01@Esfsx01

1Mon

@Epi check the 10 year chart. Other currencies don't recover loses to Swiss Francs. It's doesn't fluctuate and stay roughly the same, the Swiss Franc keeps on getting stronger.

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Epi@Epi

1Mon

@Esfsx01 It's still not a "different story". Simply buy CHF-hedged ETFs. That takes care of the currency problem.

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Esfsx01@Esfsx01

1Mon

@Epi That's the worst advice you could give. If that's the case, then checked the performance of the hedged funds compared to the unhedged ones. Keep the higher TER in mind too.

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Epi@Epi

1Mon

@Esfsx01 Yes, what now?
Hedging is stupid, not hedging is also stupid. Everything is stupid.
Then unfortunately I can't help you either. Sorry. 🤷

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Esfsx01@Esfsx01

1Mon

@Epi I didn't ask for help, I was just stating facts😂

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Epi@Epi

1Mon

@Esfsx01 Yes, then I certainly can't help you. 😅

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Harald@Madhatter5566

1Mon

I pay very little attention to whether something is currently on the Ath if it statistically has a positive expected return over an extreme period of time. Then, at least with ETFs, a positive return can also be expected in the future. This applies to the S&P 500, World and most other major indices.

The fact that the US is slipping slightly and you have to be careful because of the strength of the USD, yes. You could also say the same about Europe with regard to Ukraine etc. It could also fall tomorrow. How do you solve that? Diversification and sitting it out. Yes, individual sectors always collapse. Not all of them. And if they all collapse and everything goes down, your portfolio size is most likely irrelevant. Absolutely irrelevant.
How do you solve that? By investing in a stable environment, land and a house.
If even that crashes and the world burns, everything is irrelevant anyway. Is that to be expected? No. Otherwise you could just live in a barrel on the edge of town.

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Chris@Multibagger

1Mon

I assume that the dollar will depreciate against the euro by at least another 5-6% over the next 12 months. In my opinion, the question is not whether we will see an exchange rate of 1.20, but when? And an ETF first has to earn these currency losses.

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